Claiming back tax paid on a PPI refund

Clive1955

During the 2019-2020 tax year, my partner received a PPI refund. She submitted a claim to HMRC for the tax paid on the interest she received, the claim was submitted on 22 March 2024. The claim detailed the gross interest, tax paid and net interest. She received a letter dated 12 April 2024 from HMRC, which stated that they were returning the form as she had not provided full details of the income she received or the tax paid. The letter stated "Please put these details on the form and send evidence of the tax deducted in support of your claim".

When she logged onto the Government Gateway, the case was showing as Completed. As she was unable to provide the information on that page, she tried to start another claim but wasn't able to do so as tax year 2019-2020 was no longer available as an option. She initiated a chat with an advisor to ask why the case had not been set to Pending, when the letter was clearly asking for the information to be provided.

The advisors full response was "Unfortunately not as when we process claims if we are unable to complete them due to lack of evidence we cannot have it left as pending as this creates a backlog for other items that we have, we have to close it and then when the evidence comes in we can look into it but unfortunately as the year is not out of date there is nothing we are able to do to process this". I have to admit that when I helped her submit the claim, I failed to upload a copy of the Final Response Letter for the refund. As far a I remember, I was only able to upload one document, and due to the nature of the questions on the form, I uploaded her P60 for that year.

My partner responded as follows "Information relating to the gross interest, tax taken and net interest received was included, along with a copy of the P60 for that year. The form wasn't clear regarding exactly what information was required, but the figures were provided, and given that this information was clearly available, the claim should have been left as Pending rather than being Completed, particularly if you're sending a letter asking for that information to be provided. If I wasn't able to proceed to provide the information, your letter should have stated as much", to which the advisor replied "I understand that but as I stated earlier we cannot leave forms as pending if we send out letters requesting evidence as we have thousands of cases similar so the backlog to process newer claims would take a lot longer which we are unable to do. Unfortunately we are unable to process this claim as the year has become out of date".

Given that the claim was made BEFORE the tax year changed, and given that HMRC didn't send a reply until 18 days later, are we not correct in expecting HMRC to keep the case pending until the information they requested has been provided? I worked on PPI claims for a bank and, as long as the PPI complaint was submitted prior to the deadline (in normal circumstances) the bank had to investigate it.

Dazed_and_C0nfused

I honestly think you're getting hung up on something irrelevant.

From HMRC's perspective they have actioned her claim.

She now needs to deal with HMRC's perfectly reasonable request and return the form correctly completed.  As she had clearly made an attempt to claim a refund in time I do think you are overthinking this.

One thing to note though, you cannot simply expect the tax paid to be repaid.  Any refund will be based on her total taxable income for the year and a typical refund is upto £198 (assuming £200 tax was actually paid on the interest).

She will also receive interest from HMRC, this is payable for the period from 31 January 2021 to when the refund is paid.  Not as generous as the 8% PPI statutory interest but still a little bonus.